|Sales & Marketing|
|Costs & Contract|
|Complaints & Service|
Apex Merchant Group (apexmg.net) is a merchant account provider based in Plano, Texas, and the company looks to have been established in 2008 or 2009. Apex Merchant Group is a reseller of First American Payment Systems contracts, making it a member of the First American ISO network that appears to consist of the following companies: Appstar Financial, Eliot Management Group, Trans Tech Merchant Group, Summit Merchant Solutions, and Certified Payment Processing. Apex Merchant Group is an ISO/MSP of Fifth Third Bank, Cincinnati, Ohio. The company’s corporate headquarters is located at 6652 Pinecrest Dr., Suite #400, Plano, Texas 75024.
On October 15, 2014, the Attorney General of Minnesota filed a lawsuit against Apex Merchant Group alleging that the company fraudulently altered contract terms and used “bait and switch” tactics to trick merchants into paying higher rates than they had initially agreed to. The lawsuit seeks injunctive relief, penalties, and restitution from Apex Merchant Group.
The CEO of Apex Merchant Group, Andrew Frankel, is the brother of Craig Frankel. Craig and Jonathan Frankel formerly served as officers and directors of Certified Merchant Services, which was the subject of an FTC complaint in 2002. In that complaint, Certified Merchant Services was accused of modifying customer contracts, debiting accounts without authorization, misrepresenting the goods and services offered by the company, and failing to disclose various fees. Certified Merchant Services settled that complaint for $23.5 million. According to the Attorney General of the State of Minnesota, Craig Frankel is an investor in Apex Merchant Group.
|Apex Financial Products and Services||Industries Served|
|Key Points – Sales & Marketing|
|Uses independent resellers?||Yes|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
Apex appears to rely primarily on recruiting and hiring independently contracted agents to market and sell its financial services as well as “appointment setting” via telephone. Based on several reports, many of these agents engage in telemarketing and door-to-door sales. Numerous complaints suggest that agents receive poor training regarding the terms and conditions of Apex’s merchant account agreement and that commissions are tied to the cost of the merchant account. This means that the more expensive the rates and fees are set for the merchant during the setup process, the larger the commission the agent receives.
At minimum, it is apparent that the company has a lack of oversight of its agents as evidenced by the plentiful reports of deceptive sales tactics. At worst, the claims by the Minnesota Attorney General’s office suggest that some Apex agents have intentionally altered contract terms and used bait-and-switch methods to trick merchants into signing unfavorable contracts. Additionally, Apex appears to often enforce predatory agreements even when the merchant claims that an agent lied about its conditions or failed to verbally disclose them.
Apex Merchant Group Marketing Example
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||$125/year|
The total cost of an Apex merchant account will likely vary based on a merchant’s business type and the agent setting up the account. Numerous merchants indicate that agents often overprice the rates and fees and that the accounts often end up more expensive than what merchants were quoted. In addition, the company charges an annual PCI Compliance fee of $125.
Apex’s standard contract (available below) includes a three-year service agreement with automatic renewal for one-year terms, an Early Termination Fee (ETF) of $495 or more, a $95 annual fee, and an unlisted monthly minimum fee. These fees are automatically debited from merchants’ attached checking accounts. Merchants who choose to lease equipment may be subject to additional fees and conditions, including non-cancellable long-term leases.
|Key Points – Complaints & Service|
|Live customer support:||Yes|
|Most common complaint:||Hidden fees|
We are currently able to locate over 120 Apex Merchant Group complaints, many of which describe the company as a ripoff or a scam. This is a high number of complaints for a provider of its size and time in business, and these complaints come from both former agents and merchant customers. Agents mostly report misleading job opportunities that promise great pay and high-quality appointments set by the company. However, most of these complaints state that the appointments are usually of poor quality and that merchants often do not expect their arrival. Due to this, several agents reported costs in travel that were never recuperated because they were unable to complete sales at their appointments.
Merchant complaints primarily consist of reports of unauthorized debits from checking accounts, deceptive sales tactics by agents, “hidden” fees, poor customer service, difficulty closing accounts, and nondisclosure of important fees, terms, and conditions prior to an agent setting up an account.
|Key Points – BBB Report|
As of this review, the Better Business Bureau is reporting a “C-” rating for Apex Merchant Group based on 175 complaints filed in the last 36 months, of which the BBB considers seven to be “serious” in nature. Of the total, 108 are regarding problems with products and services, 28 with advertising and sales issues, and 39 with billing and collection disputes. Apex has resolved 112 of the complaints to the merchant’s satisfaction, while the other complaints were either not resolved or were resolved to the merchant’s dissatisfaction. The BBB also notes the government action against the company. We have adjusted the BBB’s rating to an “F” for the purposes of this review based on how our grading system would have scored the company.
* Denotes CPO-adjusted BBB score
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This review was originally published on 9/27/12 and was last updated on 3/13/15.
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